Most successful business people will tell you how business loans play a crucial role in the growth of their entities. People have great multi million ideas. However the biggest challenge has always been obtaining funds either to start or boost the business. This makes business loans one of the most commonly sought after type of loans. Financial institutions rarely fund start ups. Unless there is collateral. This is because of the risk involve. Furthermore, the fact that there is no substantial evidence that the venture will be successful. Validating the common belief that to get money from financial institutions, you need to prove that you do not need it.
Ongoing Venture
One of the requirements to secure a business loan is to have an ongoing venture that is legal, well licenced and fully compliant with tax laws. Lending institutions will always ask for supporting documents with regards to this. Besides being established, the business also needs to be making profits. This is so that the institutions can have an assurance that they will get their money back. This have to be supported by audited financial statements. These statements must be presented at the time of application.
Because of such requirements, most business people get loans to boost their existing businesses. Loan money is not use to fund overheads, but is injected into business as capital. These loans can either be long term or short term. This depends on the amount of money being sought. Short term loans are mostly smaller amounts, though this depends on the client’s repayment ability. High end business people are able to borrow huge amounts and commit to pay within short periods. Long term loans on the other hand have a longer repayment period and are ideal for small and medium businesses, so that they are not strain financially.
Applying for a Business Loan
When applying for loans, business people are usually advised not to be over ambitious. This means not to apply for huge amounts that they will not manage to pay within the agreed time. Unpaid loans attract penalties, which in return increases the loan repayment amount. In the worst cases, business assets are at risk of being auctioned if the borrower becomes bankrupt. Small business owners are usually targeted by illegal money lenders and most fall prey. They are promised very lucrative deals which are hard to turn down unless one has fallen victim before.
Avoid Loan Sharks aka Illegal Money Lenders
The main agenda of loan sharks is never to assist the borrower. Even though it may seem so initially. But to eventually posses the borrower’s assets and leave them miserable. These are cons who rely on unsuspecting loan seekers to make abnormal profits. Borrowers are therefore advised to conduct due diligence before settling for a lending institution to avoid being duped. Where money is concerned it is better to exercise patience and get the right lending institution.
Been rejected by the bank for a business loan? There is another option to get cash which is money lenders. Do be careful and only borrow from licensed money lenders. If you are looking to get a business loan, have a look through our list of money lenders. Many of these money lenders open on sunday as well! They are there almost every day to help you with your cash needs.
Credit Review is a platform for licensed money lenders in Singapore. If you have borrowed from a licensed money lender before, drop us a review about them!
If you are a money lender and do not see yourself in our list, contact us and we will update our list as soon as possible.